The Euro in Crisis: Decision Time at the European Central Bank Essay

“The Role of the
European Central Bank in the Financial Crash and the
Crisis of the Euro-Zone”
Report based on a WEED Expert Meeting
Franziska Richter
Peter Wahl
1
Imprint:
Richter Franziska, Wahl, Peter: The Role of the European Central Bank in the Financial Crash and the Crisis of the Euro-Zone. Report based on a WEED Expert Meeting
Published by: WEED - World Economics, Environment & Development Assoc.
Eldenaer Straße 60
D-10247 Berlin
2011
All rights reserved
This publication has been co-financed by the Ford Foundation.
The views expressed are those of the authors, and cannot be attributed to the
Ford Foundation.
2
CONTENT
Page
Summary 3
1. Introduction 4
2. Some basics on central banking 5
3. Historical changes…show more content…

The most important are:
- its monetarist obsession with consumer price inflation and
- its completely undemocratic, non-transparent and unaccountable status in the institutional arrangement of the EU.
Of course, inflation is an issue to be taken serious, but reducing the role of central banking to the one and only function of inflation targeting reflects a dogmatic point of view, which with the financial crisis has definitively proven to be flawed.
The financial crisis has been transformed into a sovereign debt crisis, which is threatening not only Greece, Portugal and Ireland. The future of the Euro as the common currency of 17 European countries is at stake, and hence the future of the central bank for this currency. The traditional receipts of structural adjustment with painful austerity programs for the ordinary people don’t’ work, as the case of Greece demonstrates. In spite of dramatic reductions in public spending with highly negative consequences for future growth perspectives, the debt burden is increasing. The crisis is far from being over. New and innovative ways out of the crisis have to be found.
This means also, that the ECB cannot continue with business as usual. Substantial changes are required, otherwise the collapse of the Euro-zone will be inevitable.
This report is trying to put the future role of the ECB as part of an overall alternative to the present crisis management on the agenda of

Related Documents: The Euro in Crisis: Decision Time at the European Central Bank Essay

are in risk of being extinct. Big disadvantages, but many possible solutions.
In 2010, Dominique Strauss-Kahn, Managing Director of the IMF, stated that, “crisis is an opportunity,” and then called for “a new global currency issued by a global central bank, with robust governance and institutional features, and that the global central bank could also serve as a lender of last resort.” However, he then stated, “I fear we are still very far from that level of global collaboration.” This may be true…

Abstract
The global financial crisis that began in 2007 continues to evolve and spread, it affects every country in the world. A dangerous economic instability has settled in Europe that threatens to melt down the single currency. The purpose of this research is to identify what is the future if the current crisis continues and if the Euro disappears. After examining the current situation of the crisis and its effects on each country, many questions can be asked and assumptions can be made on…

The global economy has been in turmoil for the past few years. In addition to global uncertainty, this economic downturn has caused significant problems in the European Union. Identify the causes of the ‘global economic meltdown’ and analyse what could have been done to avoid it. In your answer consider the future consequences for the European Monetary Union.
In past several years, the global economy turmoil aroused the global uncertainly. Then, it was leading to the global economic meltdown that means…

the weekend, finance ministers and central-bank governors from the Group of 20 industrialized nations tried to play down fears of new currency wars that have been spooking markets since last month's election of a new Japanese government. The Bank of England recently became the latest central bank to relax its inflation-fighting credentials by formally abandoning its long-standing objective of returning inflation to its 2% target within two years. Meanwhile European gross domestic product shrank by…

project was made by:
Abdelhameed Yousef
Konstantin Vtorov
Antonio Acevedo
Iris Neto
Isis Neto
Bruno Ustariz
The Subprime Mortgage
In late 2007, every single person in United State had felt the mortgage crisis as it was visible to even children in high school; the crisis didn’t only affect the United States, it created a panic in the financial market around the world. This is the consequences of giving too much of loan to borrower and damage the financial forming of the country. Having…

Shifting Role of Central Banks
Term Paper for ECO 407
University of Toronto
Introduction:
The term paper will explore what the role of central banks has been traditionally and how that has been changing over time. Central banks historically have had three chief functional roles (Goodhart, 2010). Firstly, maintenance of price stability under monetary administration such as gold standard or fixed exchange rate or inflation target is a crucial role. Secondly, central banks help maintain financial…

Review of European Central Bank’s Monetary Policy
FIN11128
Introduction
The European Central Bank (ECB) was established in June 1998, as the core of European System of Central Banks (ESCB), ECB formally centralized the European monetary policies since January 1999. This new monetary authority is quite different from any traditional sovereign central banks, for its operational independence and its independence from political interference are guaranteed by the European Union…

control in Euro Crisis
Introduction
Compared with the worldwide financial crisis happened since 2008, the European sovereign debt crisis has been the most serious problem for the ECM. This crisis, also called “the Euro Crisis”, has been regarded as the most serious financial crisis at least since 1930s. This crisis began with the Greek fiscal crisis in the autumn of 2009, and then it evolved into the “PIIGS Crisis”—five main European countries…

Words 2991 - Pages 12

* Test names and other trademarks are the property of the respective trademark holders. None of the trademark holders are affiliated with this website.